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Nonunion employers in the crosshairs

Many employers mistakenly believe that the National Labor Relations Act does not apply to their business because their employees are not represented by a union; however, most private-sector employers are covered by the NLRA. This past year, the National Labor Relations Board targeted nonunion employers more than ever, and some learned a painful lesson.

In 2012, the NLRB breathed new life into Section 7 of the NLRA, which provides that employees have the right “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The NLRB has interpreted “concerted activity” to include employee actions for the purpose of benefiting a group of employees.

In June, the NLRB’s chairman, Mark Gaston Pearce, stated that Section 7 “is one of the best-kept secrets of the NLRA, and more important than ever.” This past year, the NLRB used Section 7 to scrutinize common and seemingly innocuous handbook policies in nonunion workplaces, and launched a campaign to educate employees on Section 7 rights.

The NLRB’s dissection of mandatory arbitration agreements began in January 2012 with the case of DR Horton Inc. finding unlawful an arbitration agreement that precluded employees from filing joint, class or collective claims addressing wages, hours or other working conditions. The NLRB stated it is illegal to require employees to bring all claims on an individual basis because such a policy violates an employee’s right to engage in concerted activity.

In December, the NLRB broadened its analysis when it ruled in the case of Supply Technologies LLC and Teamsters Local 120 that an employer unlawfully fired 20 employees who refused to sign an arbitration agreement that, in the board’s view, precluded employees from filing charges with the board. The NLRB ordered the employees to be reinstated with back pay.

Employers should check their arbitration agreements to see whether they prohibit joint, class or collective claims, and consider revising agreements with these prohibitions.

This past February, the NLRB focused on at-will employment disclaimers. In the case of American Red Cross of Arizona, the employer required employees to sign an acknowledgment that stated the “at-will employment relationship cannot be amended, modified or altered in any way.” The board ruled the Red Cross’ disclaimer illegally required employees to relinquish rights to make efforts that could result in union representation.

However, in October, the NLRB’s general counsel issued a guidance memorandum explaining that some at-will employment disclaimers may be lawful so long as they do not require the employee to agree that the employment relationship cannot be changed. Employers are strongly encouraged to include an at-will disclaimer, but they should use language carefully written to avoid requiring employees to agree the at-will status cannot be altered.

With the explosion of social media, the NLRB has focused attention on handbook provisions and policies limiting an employee’s use of social media. For several months in late 2011 and early 2012, the general counsel issued guidance on social media; however, in early September, Costco became one of the board’s first victims.

Costco had a policy prohibiting employees from posting statements that damaged the company’s or any person’s reputation on social media sites. The board ruled that employees could reasonably construe this rule as prohibiting the act of protesting Costco’s treatment of its employees, which is concerted activity.

Later in September, the NLRB issued another blow against social media policies, in the Knauz BMW case. An employee, on Facebook, posted critical comments about the company’s marketing event for a new product. The employer terminated him, in part, because the post violated the company’s policy prohibiting the use of language that injures the company’s image or reputation. Much like the Costco case, the NLRB found that the policy illegally restricted the employee’s right to communicate about the terms and conditions of his employment.

In December, the board ordered a nonunion employer to reinstate five employees with back pay after the employer fired them for bullying another employee through posts on Facebook. In this Hispanics United of Buffalo case, the victim criticized the work of five co-workers, and the co-workers posted harassing comments in response. The NLRB ruled that the responsive posts were protected in the same manner as comments made “around the water cooler.”

Going forward, employers should consider posts to be analogous to conversations during nonwork time outside of the workplace when considering the significance of posts as the basis for employment decisions.

In 2012, the NLRB initiated an educational campaign to reach nonunion employees. The board launched a public webpage that describes the rights of employees to act together for their mutual aid and protection, even if they are not in a union. The webpage includes summaries of cases where the board found that nonunion employees were unlawfully terminated for engaging in concerted activity. The webpage is an effort to expand the board’s enforcement of Section 7 rights.

The chief lesson from the board’s activity in 2012 is that all employers, whether union or nonunion, should review employee-related policies with an experienced labor lawyer. It is uncertain how far the board will go with Section 7 rights; however, one thing is certain – gone are the good days when nonunion employers could ignore the NLRA.

Kyle Abraham is an attorney with Barran Liebman LLP in Portland, Ore. He provides compliance advice to employers and represents management in employment law litigation. Contact him at 503-276-2132 or at kabraham@barran.com.

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